Policied To Reduce Unemployment

Question 1

Reducing occupational immobility

Answer 1

E.g. apprenticeship schemes

Question 2

Reducing the geographical immobility of labour

Answer 2

Factors such as high house prices and rents stop people from getting a job / new job.
E.g. building of cheap, affordable housing

Question 3

Benefit and tax reforms

Answer 3

Reducing the real value of welfare benefits might increase the incentive for the unemployed to take a job

Question 4

Increasing AD

Answer 4

Keynesian-style stimulus

E.g. increase investment spending or lower taxes to boost disposable income

Question 5

Employment subsidies and / or employment tax cuts (demand-side policy)

Answer 5

• government subsidies for businesses that take on the long-term unemployed
• lower taxes on businesses the employ more workers

Question 6

Standard economic and social benefits of falling unemployment

Answer 6

• boosts real GDP
• raise living standards
• tax revenues

Question 7

Potential disadvantages of falling unemployment

Answer 7

• extra spending from expanding labour market might worsen the current account
• risk of an acceleration in demand-pull and cost-push inflationary pressures
• lack of jobs puts off inward inflation

Question 8

What is perhaps the biggest single cause of geographical immobility in the U.K. labour market

Answer 8

Big differences in regional house prices

Question 9

House prices in London

Answer 9

Are more than twice the UK average

Question 10

Why might people want to stay living in high-price areas

Answer 10

So they can gain from house price inflation

Question 11

Houses and unemployment link

Answer 11

Lack of affordable housing is a huge issues in the uk economy and contributed to structural unemployment

Question 12

What do many economists support

Answer 12

The idea of a programme of major house-building to stimulate demand and to improve housing affordability to reduce unemployment